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subject US Airways Says Must Cut Union Contracts
By John Crawley ALEXANDRIA, Va. (Reuters) - US Airways (UAIRQ.OB: Quote , Profile , Research ) reached a tentative agreement on Thursday with the union representing more than 5,000 customer service workers, and continued talks with two other big labor groups about steep givebacks to keep the airline flying past January. The seventh-largest domestic airline announced the agreement with the Communications Workers of America as it sought bankruptcy court permission to terminate that group's contract as well as throw out labor agreements covering flight attendants and mechanics. Any ratified concession deal would take that union off the list of those whose contracts the company seeks to terminate. Details of the giveback package with the CWA were not disclosed, but the airline was seeking roughly $137 million a year in wage and benefit cuts and work rule changes from that group. Any agreement would no doubt include steep wage reductions that would be permanent. The CWA and the other unions without concession deals in place took a temporary 21 percent pay cut in October. A ratification vote on the CWA agreement is expected to take two weeks, the company said in a statement. Any agreement would also have to be approved by the bankruptcy court. US Airways won more than $300 million in concessions from its pilots and three smaller transport workers unions in October. The airline is seeking $116 million from flight attendants and nearly $300 million from machinists. A senior official of the flight attendants union, represented by the Association of Flight Attendants, said on Thursday that negotiations were making progress. Talks with the machinists have been slow with little or no progress reported. The flight attendants have threatened to strike if their contract is terminated. The CWA had also threatened to walk off the job before reaching their agreement late on Thursday. The company says any strike would violate federal labor law governing airline workers, and it would mount a court challenge to ensure employees stay on the job. The deal with customer service workers, who include reservation and ticket agents, removes one big obstacle for the airline as it struggles to pull together cost cuts and reorganize other finances to stay in business. The company says it will liquidate in mid-January if it cannot secure $650 million in cost savings from labor contracts and win approval of its bid to terminate three union pension plans, worth another $100 million a year in savings. Continued ...
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